CPS Energy ratchets up investment in solar

This is a view of the Sarnia Solar Project in Ontario. At 97 megawatts, it’s currently the world’s largest solar farm. CPS Energy has revised plans for its next project to make it 400 megawatts instead of the original 50-megawatt facility envisioned. Photo: Courtesy Photo / SA

CPS Energy will be making a far larger investment in solar energy than the already substantial 50-megawatt project it sought proposals for earlier this year.

The utility last week notified all of the bidders for that project that they have until July 16 to resubmit their proposals — but this time for up to 400 megawatts, in large part because the price of solar continues to drop.

If built, a solar system of that size would launch San Antonio into the top tier of solar projects internationally.

Today, the largest solar installation in the world is 97 megawatts in southern Ontario, followed by several between 84 and 53 megawatts in Italy, Germany and Spain.

Four hundred megawatts can power about 80,000 homes.

That’s almost half the amount CPS needs to replace the two coal-burning units it plans to retire in 2018.

For the other half, CPS plans to buy 200 megawatts of "clean coal" from a first-of-its-kind plant to be built near Odessa, and will save 250 megawatts through home energy management systems offered to customers for free.

The increase in the solar proposal comes as something of a surprise.

The deadline for the original request for proposals was mid-May, and late last month, CEO Doyle Beneby said the utility had narrowed the finalists to two.

He told the Express-News Editorial Board in mid-June that he hoped to name the winner on June 20, when he and Mayor Julián Castro announced that several clean energy technology companies would relocate their headquarters to San Antonio.

Beneby said Wednesday that two strong proposals came in after the May deadline, but rather than disqualify them, he chose to re-open the bidding and allow companies that already had submitted to expand their initial proposals.

He described the decision in economic terms.

"I have a fiduciary duty to do the best thing for San Antonio," he said, adding that he was "floored" by the low prices he’s seeing from the proposals.

Mike Burke, founder of the San Antonio Clean Technology Forum, said the amended request will receive worldwide attention, "and sets the stage for huge benefits to the San Antonio region."

That includes the low prices CPS is seeing from bidders.

Prices for solar photovoltaic components continue to drop, leading to falling prices for the power itself.

CPS reportedly will pay 15 cents per kilowatt hour for the power it’s contracted to buy from the three 10-megawatt solar projects to be built and owned by SunEdison.

Sources say the most recent proposals are as much as 30 percent less than that. Beneby only would say that costs are "very competitive."

The average cost to customers for all the power CPS produces — from coal, natural gas, nuclear and all renewables — is about 9 cents per kilowatt hour.

Beneby has said the majority of the power CPS generates — from nuclear and coal plants — costs the utility less than 2 cents per kilowatt hour, allowing for what he calls "incremental" investments in solar energy. While 400 megawatts would be a huge leap, it still represents just a fraction of the utility’s total capacity of 6,791 megawatts.

The new bids also could bring more jobs to San Antonio. The amended request retains the original requirement for an economic development component, likely a solar manufacturing or assembly plant, and a larger installation equals greater demand.

"This is all synergistic," said Lanny Sinkin, executive director for Solar San Antonio, which advocates for residential rooftop solar. "More solar means more suppliers, more employment. This will attract things to San Antonio we can’t even imagine yet."

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